Any politician coming into government for the first time faces temptation. A little voice whispers in your ear that the way to achieve your goals is to clutch the reins of power tight. Set targets, it says; demand inspection; direct funding in ever greater detail. Our misfortune is that, for decades, generations of politicians have listened to that voice.

We live in one of the most centralised states in Europe. Only 20% of Britons think they can influence the way public services are delivered. At worst, micromanagement makes a mockery of common sense. Think of emergency patients made to wait for hours, while routine operations go ahead to meet quotas.

There is a better way. This government is committed to restoring discretion to frontline professionals and making public services more responsive to individual needs, not central targets. Instead of putting barriers in the way of local initiative, we want to free people to exercise the good sense and sound judgement in which local communities abound. This is the essence of the "big society".

On the one hand, Whitehall is stopping interfering. We are widening freedoms for local authorities, getting rid of pettifogging bureaucracy and ending the culture of target chasing. Already we have freed up £7bn of previously ring-fenced council funding and scrapped 4,700 central targets for councils.

But getting central government out of the way is only half of the story. For the big society to flourish, it's vital to equip the volunteers, the activists, the social entrepreneurs – the everyday heroes who want to roll up their sleeves and help make Britain better – with real influence. The localism bill, to be introduced to parliament on Monday, will put significant powers in their hands. I want to outline two in particular.

First, a right to challenge how things are done. There is a long tradition of anti-monopoly law that applies to the private sector. It enjoys widespread support, because we know that competition encourages innovation, drives improvement and leads to a better result for consumers. Compare this with the public sector – where the providers of services from healthcare to education are, more often than not, playing to a captive audience, without the same incentives to improve and innovate.

Paving the way for a greater diversity of providers will both allow new ideas to flourish, and put local people in the driving seat of public services. This is the rationale behind the Academies Act, which is already enabling the creation of new free schools. But the same arguments are just as relevant to other local services, from running community centres to support for the homeless. Many social enterprises have brilliant ideas about how they could deliver these services more effectively. Sometimes they could even do it better for less. Some councils already recognise the value of social entrepreneurs' enthusiasm and knowledge and commission them to step in. In other places, by contrast, good suggestions fall on deaf ears.

The new law will ensure that social entrepreneurs everywhere get a proper hearing, with councils formally obliged to consider their proposals without prejudice. Opening up to new ideas in this way has the potential to help deliver better results and make taxpayers' money go further.

The second major new power included in the bill is a "right to buy". Every community has a place that means a great deal to local people. The village shop, for example, isn't just where people buy their milk – it's where they get to know their neighbours and find out what's going on. The value of these local amenities is highlighted in extraordinary times. In the current cold snap, for example, many village shops provide a lifeline to older people who otherwise wouldn't be able to buy the essentials. Shopkeepers know in whose ear to drop a word when they think a frailer customer might be snowed in. Such places can be the hearth in which community is kindled.

In the recession, the pressures on local businesses and amenities have redoubled, but many groups refuse to let the places they hold dear simply get sold up or closed down. In north and south, in town and country, community trusts have taken on responsibility for old town halls, community centres, pubs, shops and more. For every success, though, another group gets tangled up in red tape, or pipped to the post by private bidders with ready cash. We want to shift the balance. In the future, local authorities will keep a list of all the assets that the community feels are important. When anything on the list comes up for sale, councils will give voluntary groups the opportunity to put together a credible bid, making it easier to keep the amenities people love in public use and part of local life.

I look forward to discussing these, and many other decentralising measures – including proposals to make planning more responsive and give greater freedom to councils – in detail, as the localism bill makes its way through parliament.

That little voice urging politicians to take central control has had its day. Instead of Whitehall calling the shots, it will increasingly be local people who define what they want from public services in their neighbourhood, and exactly when, where and how they work. In other words, there's a new boss. You.